With the market participants paying close attention to the U.S. payroll risk-event due later in the global day, the yen drifted lower across the board on Friday morning in Asia in a relatively subdued volume.
Economists expect an increase of about 200,000 jobs in December, while the unemployment rate is expected to remain at 7.0 percent.
Ahead of the monthly report, the Labor Department released a report on Thursday showed that initial jobless claims fell by more than expected in the week ended January 4th.
The report said jobless claims dropped to 330,000 from the previous week’s revised figure of 345,000, while economists had expected jobless claims to fall to 335,000.
The jobless claims data combined with Wednesday’s better than expected private sector jobs report has led some to believe that the monthly report could show an increase in jobs in excess of 200,000.
While strong job growth would be a positive for the economic outlook, it would also further solidify expectations that the Fed will continue to scale back its asset purchase program in the coming months.
In economic news, China posted a merchandise trade surplus of $25.64 billion in December, the customs office said. That was well shy of forecasts for a surplus of $32.15 billion, and down sharply from the $33.80 billion surplus in November.
Exports were up 4.3 percent on year, also missing expectations for an increase of 5.0 percent following the 12.7 percent surge in the previous month. Imports spiked an annual 8.3 percent versus forecasts for 5.0 percent after rising 5.3 percent a month earlier.
European Central Bank President Mario Draghi reiterated on Thursday that the 18-nation economy is set to experience a protracted period of low inflation and asserted that the bank will maintain easy policy for as long as needed. The ECB maintained the key interest rates unchanged for a second straight month. The main refi rate was held at a record low 0.25 percent.
The yen fell to a 4-day low of 115.79 against the Swiss franc, pulling back from its overnight closing value of 115.54. Further bearish extension could lead the pair re-testing the 116.0 support and the likelihood of a reversal could help the local unit challenging the 115.0 resistance area.
The Japanese unit reached a low of 142.87 against the euro, 172.96 against the pound and 104.96 against the US dollar in early Asian trading on Friday. The yen also weakened against the resource-linked currencies, falling as much as 96.76 against the Canadian dollar, 93.43 against the Australian dollar and 86.58 against the New Zealand dollar.
On the downside, the Japanese unit may find support levels at 143.20 against the euro, 105.10 against the greenback, 173.20 against the British sterling, 94.0 against the Australian dollar, 97.0 against the Canadian dollar and 86.80 against the NZ dollar.
Looking ahead, the preliminary readings of Japan’s leading and coincident indexes for November are due out shortly in the Asian session.
The Swiss jobless rate and inflation data for December and the U.K. industrial and manufacturing production for November are expected to garner market attention in the European session.
Besides the pivotal U.S. nonfarm payrolls data, Canada’s employment for December and wholesale trade for November, and the U.S. wholesale inventories for November will also be closely watched in the North American session.
